Can Innovation Save the Environment?

In 1987, the Brundtland Report Our Common Future commissioned by the United Nations for the Earth Summit defined sustainable development as « development that meets the needs of the present without compromising the ability of future generations to meet their own needs. » This definition is important because it shows the awareness and institutionalization of environmental concerns. However, too often there has been a tendency to oppose ecological and economic needs, in order to support the argument that décroissance or de-growth is inevitable—and the only solution to global warming, biodiversity degradation and the depletion of natural resources.

It has been forgotten that the same Report also, and above all, highlighted the role of technological progress and innovation in sustainable development: « two concepts are inherent in this notion: the concept of ‘needs’, in particular the essential needs of the world’s poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs. »

In this view of sustainable development, the needs of present and future generations are therefore not limited by the stock of natural resources, but by the state of the technologies needed to use them. It is not only about emphasizing the limits of the planet’s ability to meet needs, but rather to point out the capacity of people and technologies. From this logic, then, improving the technology through innovation would make it possible to meet needs.

Environmental innovations or eco-innovations (i.e. new processes, products, techniques and organizational methods that are compatible with an ecological approach) must be at the heart of sustainable development strategy. By introducing requirements, laws, standards and rules to encourage companies to innovate in environmental matters, thus far regulation has been the preferred mode of action for governments.

Regulate for Green Innovation?

Since the emergence and growing importance of sustainable development concerns, economists have been investigating what kinds of environmental regulations are most likely to incite companies to improve their environmental performance. Some of their work has had a real impact on public environmental policies: the carbon tax, the carbon emissions market, and product standards are all environmental policy instruments whose effectiveness has been highlighted by economists. However, the latter tend to neglect the precise way in which each policy leads to an improvement in the environmental performance of firms. In fact, they believe that environmental innovations will come solely from implementing environmental regulations!

The study conducted by INSEE in 2009, the only survey available to date, provides rich information on the behaviour of French companies in terms of environmental practices and shows that the emergence of eco-innovations is linked to multiple factors, and not just to regulatory pressure. This detailed analysis of the behaviour of French companies highlights the fundamental importance of the interdependence between environmental innovations on the one hand and the transformations experienced by companies implementing new, greener practices on the other.

Companies react to environmental regulations by adopting incremental innovations, i.e. minor modifications to their products or processes. These are « end of pipe » innovations, corresponding to ex-post pollution control by, for example, installing air filters that reduce polluting emissions. Such innovations have a modest positive effect on the environment, but they cannot be considered as the be all and end all of a real ecological transition, and do not meet the main goal of sustainable development.

CC PublicdomainPictures.net Karen Arnold

Companies tend to make strategic use of regulation. In particular, when they adopt greener practices, they try to improve their brand image by including that fact in their communications’ strategy. For example, many brands of dishwashing liquid have communicated about their more environmentally friendly practices, whereas these were simply a mandatory compliance with stricter European regulations from 2004 (Regulation No. 648/2004 on detergents and cleaning products).

Change to Innovate?

Contrary to a widespread techno-phile vision, which limits environmental innovation to new « green » products or processes that pollute less, studying the information provided by French companies shows that environmental innovations are strongly interdependent not with technological change (new products or processes that are more ecological), but rather with organizational change, i.e., through changes in hierarchical relationships, the assignment of tasks, or working methods.

Thus, adopting new environmental practices requires a learning process on the part of the various types of actors within the company, which implies changes in the organisation of work and production. For example, the implementation of greener practices can result in more collective work practices and a reduction in the weight of the hierarchy. Such an environmentally friendly approach can be linked to an increase in employee productivity and a stronger identification of the employee with the company: two virtuous ways in which environmental and organisational innovation are linked.

Towards a Profound Ecological Transition?

Can environmental innovation lead to new production methods, or a transition to new business models? Can it strengthen the rationales behind a circular economy?

A Circular Economy
In the traditional linear model of production and consumption, raw materials are extracted, processed, consumed and discarded. In contrast, the circular economy model aims to « close the loop », to ensure that goods and services are produced while limiting the consumption and waste of raw materials, water and energy sources. In France, its implementation is now an official public policy objective following the adoption, on 17 August 2015, of the Energy Transition Law for Green Growth.

In terms of organizational and environmental practices, implementing a circular economy model requires improved waste prevention through a set of policies in the design, distribution and consumption of the good; but also a management of this waste, which would re-inject it into the economic cycle promoting reuse and recycling. The positive environmental effects of this type of model are numerous and significant. One of the major implications comes from the fact that it gradually separates economic growth from the consumption of raw materials.

However, the diffusion of this model and environmental practices that have a radical effect on the environment are up against powerful forces of inertia. To achieve a real ecological transition, the nature of this inertia and the institutional rationales that govern the processes of spreading environmental innovations should be further analysed. We need explore the extent to which the processes of environmental innovation are associated with regulatory institutions (explicit rules, regulations, etc.) that limit action, and what types of social values and norms, belief systems, and imagination they require… Much work remains to be done for researchers!

In the current state of knowledge, we can still conclude that innovation can help the environment…but only if companies’ systems of representations and beliefs change. Continuing to rely exclusively on regulatory action will fail. To initiate the profound ecological transition to meet the needs of present and future generations, a massive diffusion of environmental innovations is necessary. To do so, we need a profound change in firms’ practices.

[…] Can Innovation Save the Environment? In 1987, the Brundtland Report Our Common Future commissioned by the United Nations for the Earth Summit defined sustainable development as « development that meets the needs of the present without compromising the ability of future generations to meet their own needs. » This definition is important because it shows the awareness and institutionalization of environmental concerns. […]